]]>Aereo, the streaming start-up that was poised to upend the TV industry until the Supreme Court shut it down, has been sold for scraps.

Aereo’s assets fetched under $2 million at auction, according to a person familiar with the sale. The figure is a far cry from the $90-$100 million that media mogul Barry Diller and other investors put in the company as part of high stakes gamble on copyright law.

“We are very disappointed with the results of the auction. This has been a very difficult sales process and the results reflect that,” said William Baldiga, counsel for Aereo and partner at Brown Rudnick, in a statement.

This outcome likely reflects the legal sword that continued to hang over Aereo even in bankruptcy, as broadcasters pressed their claims for huge copyright damages. As a result, Aereo was sold off in pieces rather than as a company.

The primary winner of the auction appears to be TV recording service TiVo, which acquired Aereo’s trademark along with customer lists and unspecified other assets.

Meanwhile, the holding company RPX, which is a patent troll of sorts, has acquired Aereo’s patents.

The person familiar with Aereo said the company has yet to sell certain other assets, and that it is still looking for other opportunities. (It’s unclear what other assets could be left, one guess is trade secrets and other know-how from the company’s engineering team.)

The person also suggested that the broadcasters, including ABC, NBC, CBS and Fox, were determined to bury Aereo’s technology rather than see it emerge under a new business model.

Until it was shut down last fall, Aereo offered consumers a means of watching and recording TV on mobile devices. While some Aereo content came via partnerships with stations like Bloomberg TV, most of the shows came via over-the-air TV.

Aereo, which provided subscribers with a remote antenna and DVR, claimed it was simply offering consumers a technology akin to a VCR, which is legal under copyright law.

An appeals court judge in New York initially agreed with Aereo’s position, noting that the service was akin to cloud-based DVR’s which courts have found to be legal. The broadcasters prevailed at the Supreme Court, however, in a controversial decision that appears set to sow further confusion over copyright.

]]>A giant legal battle between TV broadcasters and upstart streaming service Aereo, already raging in the northeast and the District of Columbia, has crossed the Mississippi.

In a complaint filed on Monday, a Fox station asked a federal judge in Utah to shut down the service on the grounds that Aereo’s technology, which uses tiny antennas to beam over-the-air TV shows to viewers for $8 a month, infringes on copyright.

The legal dispute is important because Aereo now represents the greatest threat to the TV industry’s “bundle” model, which involves force-feeding giant packages of channels to cable and satellite viewers at ever higher prices. Aereo CEO Chet Kanojia, whose company is backed by media mogul Barry Diller, has described the system as “abusive” and proposes instead a “rational bundle” system.

The legal fight turns on whether Aereo’s technology, which lets each subscriber watch and record TV via a personal antenna, is a “private” transmission under copyright or, instead, an unauthorized rebroadcast. In a major victory for Aereo, a New York appeals court accepted the start-up’s private transmission theory, giving it the green light to operate in New York, Vermont and Connecticut.

The broadcasters have won victories of their own as a result of suing an Aereo clone, known as FilmOn, and winning a California decision that effectively shuts out the streaming services in nine western states. Since then, the TV industry won a similar ruling in the nation’s capital, while Aereo has won in Boston, which will let the company operate in New England for the time being. (If you’re losing track, the Disco Project has a helpful map).

So how will the Utah case change the game? The short answer is that, since it is taking place within the 10th Circuit, it will determine Aereo’s fate in six more western states (Utah, Wyoming, Oklahoma, Kansas, New Mexico and Colorado).

Update: In a statement, Aereo referred to the New York appeals court ruling and stated: “Fox is simply not entitled to repeated do-overs on this matter. Aereo will respond to this latest attempt at a mulligan in due course.”

The bottom line is that the legal fight is fast producing a strange situation where half of the country can watch Aereo and the other half cannot. The whole thing is likely to be determined by the Supreme Court in 2015.

]]>The Daily Beast is seeking to quash rumors that it will shut down following Tina Brown’s departure. The company’s interim CEO, Rhona Murphy, said Friday that the site “is not for sale and is not closing.” Parent company IAC has “approved in concept” the site’s operating budget for 2014, and it’s getting a redesign. Also, the Daily Beast “averages more than 15 million unique visitors a month, according to Omniture, and traffic is up 22 percent this year alone.” IAC CEO Barry Diller praised Brown’s tenure at the site, “even throughout the two unfortunate Newsweek years.”

]]>In their fight to shut down Aereo, a start-up that lets viewers stream TV to their mobile device for $8 a month, broadcasters are urging a federal court in Boston to apply a recent ruling that slapped a broad injunction on a rival service with Aereo-like features. In response, Aereo claims that the two companies’ technology are not the same and that the ruling, issued in the District of Columbia, misunderstands copyright law.

The Boston court dispute is just one flashpoint in a larger legal chess game between broadcasters, who argue that Aereo is illegally retransmitting their signal. The start-up has an avowed goal of breaking up “the bundle” model of television in which consumers are forced to buy expensive packages of channels, many of which they don’t watch.

Aereo claims that its service is distinct from earlier internet TV models, which have been found illegal, because it provides subscribers with their own tiny antenna to transmit and record over-the-air television — an act that Aereo likens to making a private copy, such as a VHS recording, which is permitted under copyright law.

In the new court filing in Boston, reported by the Hollywood Reporter, Aereo makes the following claims about the District of Columbia opinion, which shut down a service called FilmOnX:

“To the extent the Opinion makes factual findings about the technology used by FilmOn, certain descriptions of the technology do not appear to track how the Aereo technology actually works.”

“In finding that all individual transmissions of separate copies of the same work somehow must all be aggregated as a “public” performance, the Opinion improperly conflates “work” with “performance,” […] The undisputed facts establish that an Aereo member may only transmit her own individual copy to herself. That is the performance at issue and it is not “to the public.”

“The Opinion further erroneously ignores the importance of the user’s volition, which was emphasized in Dish Network. Because an Aereo member makes a private transmission that only she is capable of receiving, the performance that user makes is private”

Yes, it’s all rather technical but the upshot is that the Boston court will have to decide which opinion to follow: that of a New York appeals court which favors Aereo, or that of lower courts in Los Angeles and DC, which side with broadcasters (though neither of the latter opinions involve Aereo directly).

In the meantime, the court rulings mean Aereo is for now available in many parts of the country but that it’s effectively shut out in nine western states. The legal mess is likely heading to the Supreme Court though Aereo has time on its side. Here’s the new filing:

]]>Tina Brown, the legendary former editor of Vanity Fair and the New Yorker, is stepping down from her latest attempt at reinventing magazines: she announced on Wednesday that she is leaving as editor of The Daily Beast, the online media outlet that she started in 2008 with the backing of media mogul Barry Diller and later tried unsuccessfully to merge with Newsweek. Diller is now considering a sale of The Beast, according to some reports — although it remains to be seen whether anyone will actually want to buy it.

Can we learn something about what is happening to media in the web era from Brown’s failure at the Beast? Michael Wolff — an author and former entrepreneur who knows a thing or two about online failures himself — argues in a piece for The Guardian that Brown shouldn’t have to shoulder all the blame for the (almost) demise of the site, saying she is “a representative figure of the struggles of modern media life, rather than the person who should be blamed for it.”

“Magazines – knowing, insidery, cruel, fawning, beautiful, upscale (remember that word?) magazines – died, leaving her without a profession… and then, without warning, she had to learn the methods and sensibility of the new digital publishing world, which must have seemed like another country to her.”

The good old days of print are over

Wolff and others have noted that Brown’s approach to the Beast — and to Newsweek as well when it was still part of the operation — was very much taken from the good old days of print magazines, when advertising revenue was still flowing like a mighty river, and no one had to worry about aggregators or competition from upstart online publications like BuzzFeed or Perez Hilton. Brown used all the tricks she had learned (and taught others) and yet they failed to work their magic. As Wolff puts it:

“She shortly recreated… an ever-expanding publishing operation in the old style. In a digital world of strained circumstances, she hired editors, paid writers, killed pieces, rethought and revamped and redesigned… and generally conducted herself as much as she possibly could as though the world was still recognizable, even comfortable.”

Obviously revenue (or the lack of it) was a big part of the Beast story, just as it has been for many other magazines and publishers trying to make a living online: despite her protests that things were getting better, the Daily Beast’s traffic numbers were terrible, and the site is expected to lose as much as $12 million this year. That’s an expensive hobby, even for Barry Diller. And even the Beast/Newsweek’s attempt to troll readers with salacious “cover” stories didn’t seem to work.

picturing Tina Brown as Norma Desmond in Sunset Boulevard: "I am big — it was the magazines that got small!"

In part, that’s because there are plenty of other sites already doing this, such as BuzzFeed and Gawker and dozens of others. If anything, the web is drowning in that kind of content — the ability to put together a catchy headline and a controversial photo with some snarky commentary is no longer the exclusive preserve of a handful of printed magazines like Vanity Fair or Esquire. Try as she might, Brown could never seem to grasp that, or adapt to it.

The Beast never really seemed to get it

There are magazines making it online, although the list is fairly short: some continue to pursue the iPhone app or paywalled approach, but the ones who are really succeeding (depending on your definition of success) are titles like Forbes and The Atlantic. They have completely reinvented themselves for the web, by taking advantage of the speed and breadth of what online publishing offers — and also the potential advantages of user-generated content and innovative advertising approaches like sponsored content or native advertising, although not everyone agrees that the result is beneficial.

A source sends over this picture of Tina Brown in a Chelsea restaurant right now, yelling into the phone. pic.twitter.com/Ah8mHKo5se

More than anything, Brown’s failure seems to stem from a lack of understanding about how the publishing game has changed, not just in terms of revenue, but in the fundamental ways in which content and the marketplace intersect. The old model, where an editor like Brown could be the queen of a tiny magazine empire and shape the coverage and impact of stories almost single-handedly, has given way to a future driven by readers — a demand model rather than a supply model, to put it in economic terms.

It’s not just algorithms: what people want to read becomes the guiding principle, not what editors decide they need. Is that a good thing or a bad thing for the media industry, or for society as a whole? That’s a question for another post, but that fundamental shift is what Brown failed to navigate, and it not only eviscerated Newsweek but seems to have killed the Beast as well.

]]>Aereo, the start-up that uses tiny antennas to deliver TV to smartphones for $8 a month, has been operating in Boston for months without the high profile copyright battles it confronts in New York.

That changed on Tuesday when a Boston broadcaster, Hearst-owned WCVB, sued to stop Aereo from retransmitting its over-the-air signals, and claimed the service is harming its business:

Aereo further free-rides on WCVB’s substantial investment in its broadcasting infrastructure. Aereo is willfully, wantonly, and unfairly exploiting WCVB’s programming and broadcasts for its own commercial benefit.

The new lawsuit further complicates a national chess game that pits media mogul and Aereo investor, Barry Diller, against powerful broadcasters like CBS and ABC in a bid to define how Americans can watch TV. Diller and Aereo Chet Kanojia argue that the existing TV industry is a cabal that forces viewers to buy expensive bundles of channels they don’t want to watch; Aereo wants to offer a “rational” bundle instead.

Aereo won a critical legal victory last year when New York’s Second Circuit Court of Appeals agreed that the upstart was not violating copyright because each subscriber rents their own personal antenna — which means, in the eyes of the court, that the service is akin to a private DVR rather than a mass transmission. (Under copyright law, private copying and recording is permitting while broadcasting to the public is not).

Aereo, now totally legal in three northeast states, soon announced plans to unveil the service in 22 more cities but, so far, it has only appeared in three: New York, Boston and Atlanta.

The slow-roll out is likely tied to the larger legal fight in which the broadcasters won an important victory of their own last year, shutting down a would-be Aereo competitor — and getting an injunction blanketing most of the western United States. The conflicting legal opinions in New York and California tees up the case up for a possible hearing by the Supreme Court. Aereo declined to comment on the Boston suit, which was first reported by Bloomberg.

If you want to see the legal status of Aereo where you live, see our map here. The new legal filing is below:

]]>You know you can blog with Tumblr or WordPress, or self-publish a book on Kindle or iBooks. But what’s next for the publisher who wants to sell a mobile-native magazine, or the blogger who’s sick of messing with plugins?

Here are six startups that offer new options to creators. Three of them — Periodical, 29th Street Publishing and Creatavist — let you create and sell mobile-friendly magazines, ebooks and newsletters; the other three — Postach.io, Ghost and Glipho — aim to let you blog in a new way.

All of the companies featured here launched in the past few months (or, in Ghost’s case, will launch later this summer), so they’re still working out some quirks and rolling out new features. What they have in common, though, is that they’re all trying to make writing and publishing easier and better. Check them out and let us know what you think (and which startups we should add to our list).

What you can do with it: Periodical, which allows users to create and sell publications — magazines, newsletters and so on — for a variety of platforms including Apple’s Newsstand, embraces Craig Mod’s model of subcompact publishing: the idea that digital publishing should be simple and that the works created should be very easy to read on smartphones and tablets. Cofounder Sean Stevens told me that most users of the platform use The Magazine, originally created by Instapaper founder Marco Arment, as a model.

What we like: It’s easy and relatively inexpensive to sell content through your own branded app.

Background and funding: Periodical, which is six months old, is one of the startups in Los Angeles-based incubator Launchpad LA, through which it’s received $100,000 in seed funding. Cofounders David Mancherje, Shahruz Shaukat and Stevens previously worked together at comedy podcast network Earwolf.

Platforms supported: Users create their publication — which can include text, photos and videos — on Periodical’s site, set the price and then publish it on the web or as an iOS app; the platform also supports delivery to Kindle. Android support is coming soon.

Number of users: N/A.

Cost: Free to create a web-only publication; $29/year for Kindle delivery; $99/year to create a custom-branded iOS app (the pricing will be the same for Android). In addition, Periodical takes a cut of a publication’s subscription revenue: 20 percent for subscriptions through the web, Kindle and Android, and 9 percent for subscriptions through Apple’s Newsstand (on top of the 30 percent fee that Apple charges).

What you can do with it: Create multimedia stories and publish them as apps, ebooks and for the web.

What we like: You can create a one-time project and push it out to the world. You don’t have to commit to publishing regularly or on a set schedule.

Background and funding: Creatavist, which launched in April, is the software that Atavist originally developed in order to publish its own e-singles. Atavist has raised $1.5 million in its first funding round and an undisclosed amount in a second round from Scott Rudin and Barry Diller’s IAC. (Atavist is providing the technology for Diller and Rudin’s yet-to-launch digital publishing house.)

Platforms supported: Web, iOS. Users can also export their works as ebooks and upload them to digital bookstores like Kindle.

Number of users: N/A, but companies working with Creatavist so far include NPR and corporations like the Four Seasons. Atavist CEO Evan Ratliff told me that a lot of photographers are also using the platform.

Cost: Free to create one story and publish it on the web and in Creatavist’s iOS app; $10 per month to create unlimited stories and publish them on the web and in Creatavist’s iOS app. An option to publish stories through your own branded iOS app and on the web is coming soon, with pricing starting at $250 per month.

Availability: Available now.

What’s next: Within the month, users will be able to sell their works through Creatavist’s app (right now, they can only give them away for free). Atavist will take a cut of the sales; that amount has yet to be determined.

What you can do with it: Publish and sell web and iOS magazines as individual apps. 29th Street Publishing, like Periodical, embraces the subcompact publishing model.

What we like: 29th Street Publishing isn’t open to everyone, but because the company closely vets the publishers it works with, you know as a reader that you are getting high-quality content. And the vetting process forces publishers to come up with concrete publication plans. 29th Street also provides publishers with a custom-built iOS analytics platform.

Background and funding: The NYC-based 29th Street Publishing was cofounded by former Six Apart employees David Jacobs and Natalie Podrazik. Editorial director Blake Eskin was previously web editor at The New Yorker.

Cost: 29th Street helps develop, design and build magazine apps for free and then takes a revenue share of subscriptions. It also licenses its CMS, app and analytics platform to companies that don’t want to do a revenue share or that want to put out a free magazine (like ProPublica).

Availability: It’s not open to everyone; see above. “For us to work with someone, we want to make sure that their work makes sense for our platform, that they have an audience (or they have a clearly defined potential audience), and that we believe that they are going to make good on their commitment to subscribers,” cofounder and CEO Jacobs told me. “Over time, we’re going to open the platform up much more broadly, but we’re being selective for now as we focus on the product.”

What’s next: Maura Magazine will launch a web version this month, and Android versions of some titles are coming this fall. 29th Street even plans to experiment with print.

What you’ll be able to do with it: Publish a blog in a simple and elegant, open-source platform that provides more control over content than Tumblr but is simpler than WordPress. “It differentiates from Tumblr in being open source — which means you own your data, and you can control every part of the program (neither of which you can do with Tumblr),” founder John O’Nolan, a former WordPress exec, told me. “It differentiates from WordPress in being for bloggers. WordPress is a big complicated content management system that can power all sorts of websites. Ghost is just for blogs.”

What we like: The platform looks beautiful and has a one-stop dashboard that combines your blog’s traffic and performance data in one place.

Background and funding: Founded by former WordPress exec John O’Nolan, Ghost raised £196,362 (USD $298,627) in a successful Kickstarter campaign this spring (far beyond its £25,000 goal). Ghost will operate as a nonprofit software foundation.

Platforms supported: Web; responsive design will work on all devices.

Number of users: Ghost hasn’t launched yet, but 5,236 people backed its Kickstarter campaign.

What you can do with it: Publish notes created in Evernote to a personal blog. “People who use Evernote are very passionate about Evernote,” cofounder Shawn Adrian told me, noting that the company’s seen a bunch of users switch over from Tumblr.

What we like: The fact that you can make a “curated” blog with all types of content — recipes, articles and so on — that you’ve saved to Evernote.

Background and funding: Two-month-old Postach.io is based in Nanaimo, British Columbia. Cofounders Shawn Adrian and Gavin Vickery previously built QuoteRobot, which is proposal and invoice-creating software for web designers, and Adrian describes that as their “bread and butter app.” They’ve received $200,000 in funding from Vancouver’s Full Stack Ventures. Evernote reached out after seeing Postach.io on Hacker News, and it’s a contestant in the 2013 Evernote Devcup.

Platforms supported: Web. Users tag notes for Postach.io — which can include text, audio, video, images and links, as well as Evernote Food posts and web clips — in Evernote and they’re automatically published to a blog. Users can also import their Tumblr to their Postach.io blog.

Number of users: 3,500.

Cost: Free, with a premium version planned.

Availability: In beta, available to anyone.

What’s next: Tighter integration with Evernote, pro themes, more sharing and discovery features, a premium version. Adrian said that the company is also talking with Evernote about referral fees when Postach.io users upgrade to Evernote Premium.

What you can do with it: Create a blog, then publicize that blog through Glipho’s built-in social network. Users rank and highlight content, some of which is spotlighted on Glipho’s homepage. SEO tools are built in, and users can follow writers and topics they’re interested in.

What we like: The curation and recommendations provide a service for readers as well as writers.

Background and funding: The London-based Glipho launched its public beta in March and has 6 employees in the U.K. and one in the U.S.; it’s hiring three more employees in the U.S. to open a Boston-based office. Founder and CEO Roger Planes previously developed software and websites for journalists. The company has raised $750,000 in a seed round.

Platforms supported: Web; import existing blogs from Tumblr, WordPress and Blogger. Glipho has an Android app and is awaiting approval from Apple on an iOS app.

Number of users: N/A, but Glipho says it has users from 120 different countries who have published or imported over 150,000 blog posts.

]]>The television industry has its hands full, fighting forces that want to break up the lucrative “bundle model” in which consumers must pay for hundreds of channels in order to receive the dozen or so they actually watch. Bundle opponents include Senator John McCain, satellite TV provider Dish Networks and an upstart streaming service called Aereo.

Aereo, which uses tiny antennas to stream and record shows to computers and mobile devices, has been a special worry to the TV industry because courts have said it’s protected by a loophole in copyright law. The industry, however, received an unexpected gift when an erratic billionaire named Alki David launched a streaming service of his own — without the legal firepower to back it up.

According to a source familiar with the case, Alki’s arrival came as a nasty surprise and wrecked a large part of the U.S. chessboard where Aereo’s investors want to remake the rules of TV. The billionaire doesn’t see it that way. Here’s how the drama that could change TV has unfolded so far:

Buttoned-up Barry takes on TV

On the surface, the story of Aereo is about a brave startup that uses tiny antennas to bring broadcast TV stations — which are free to receive in the first place — to laptops and mobile devices. The service allows people to watch and record local channels for $8/month and, unlike conventional TV subscriptions, lets customers come and go as they like without contracts or equipment.

But Aereo is also the tip of the spear for a bigger gambit by media mogul Barry Diller to blow up what journalist Peter Kafka calls the “TV Industrial Complex.”

This desire to remake TV led Diller to put $20.5 millon into Aereo’s fledgling service in early 2012. The money, however, wasn’t just an endorsement of Aereo’s technology; it was also an attempt to leverage a controversial 2008 court decision. The decision, which involved remote DVRs, inspired Aereo to create a “one antenna, one viewer” system that — in the company’s view — creates private TV streams that are legal under copyright law.

According to the source, who did not want to be identified, Aereo was “buttoned up” and ready for a legal fight even before it went live in New York City in early 2012. The company had court briefs at the ready, and made sure that all legally-discoverable facts of the case backed up its “private viewing” theory of TV streaming.

When to no one’s surprise the major broadcasters sued to shut it down, Aereo fought hard — and won. The company then won an even bigger ruling this April, when a split Second Circuit Court of Appeals upheld the decision, after finding that: “Aereo functions much like a television with a remote Digital Video Recorder (“DVR”) and Slingbox.”

Enter Alki

Alkiviades David — everyone calls him “Alki” — is a 45-year-old heir to a shipping fortune who likes to host Hollywood parties and dabble in the entertainment industry. He’s had small parts in films like The Bank Job, but also runs a U.K.-based company called FilmOn that plucks TV signals from the air and streams them to computers.

When FilmOn launched in the United States in 2010, Alki offered to pay retransmission fees like those that cable networks pay to broadcasters through a complicated regulatory system. The broadcasters, however, didn’t bite and sued him instead. They quickly obtained court orders and that was the end of it — until, that is, Aereo won in New York court two years later.

The Aereo victory irked Alki and prompted him to relaunch FilmOn’s TV service under new corporate names. The names, “Aereokiller” and “BarryDriller,” were not just a legal trick but also a finger in the eye of Diller, the media mogul who is backing Aereo. Predictably, the networks sued Alki all over again. (Diller sued too, over misuse of his name.)

According to the source familiar with the case, Alki’s approach to litigation is slapdash and reckless — the very opposite of Aereo’s buttoned-up style. As a result, Alki’s reborn Aereokiller was easy-pickings for TV industry lawyers who had no trouble persuading a Los Angeles judge to issue an injunction.

Rani Molla

“Bad facts make for bad law,” said the source, adding the ruling was a big blow for Aereo and its carefully planned legal strategy. This is hardly surprising; the injunction applies not just to Los Angeles but the entire 9th Circuit, which sprawls across most of the western United States (see map at right.)

The LA decision was a setback for Alki but even more so for Aereo, which declined to comment for this story. The playboy’s antics not only shut down an enormous market; they also provided a California-sized foothold for the broadcasters to launch what could turn into a Supreme Court challenge to the new technology. (The broadcasters also sued him in the District of Columbia last week, possibly in the hopes of getting to the top court even quicker; FilmOn has since retreated).

As for Alki, he doesn’t regret a thing.

Alki explains

Alki speaks in a posh but kind British accent and, in a recent phone call, his manner was gentle and patient. He shares Aereo’s frustration with the TV Industrial Complex but also see Diller and Aereo as parvenus next to his own operation.

“Barry and I share many mutual friends but have never met. I tried to reach out a few times before the launch of Aereo,” said Alki, adding that he chose to needle Diller with “Aereokiller” and “BarryDriller” because Aereo sounded too much like an earlier version of his streaming products called “Arrow.”

Alki makes a legitimate case against TV industry inertia and a Nielsen ratings system that, in his eyes, is considered broken by everyone in Hollywood. He is rational on our call — even though that is not his reputation.

The source familiar with the legal case says Alki is an erratic, bull-in-a-china-shop strategist. A different source who knows Alki slightly recalls receiving a bizarre, rambling phone call at four in the morning. And an October profile in the Hollywood Reporter portrays Alki as a sincere but volatile personality who likes to cultivate controversy and run with outsiders.

“I haven’t drunk alcohol in 15 years. I like to have fun and play practical jokes,” Alki says. As for suggestions that he is derailing Barry Diller’s careful campaign to remake TV, Alki is all magnanimity.

“FilmOn has been in live TV much longer and is doing a better job … We’re not trying to ruin Aereo’s game. We’re very grateful for Aereo’s success with the [DVR] concept.”

It’s doubtful Aereo feels as generous but, for better or worse, the future of the TV bundle could well be determined by the playboy who crashed the party.

Next moves

In early January, Aereo announced plans to expand to 22 more cities with the help of $38 million in new funding from Diller and others. The expansion was supposed to take place in “late spring” but, as of June, Aereo has only expanded to Boston.

The Aereo investors may be holding back on releasing more money, and turning on more antennas, until California’s 9th Circuit rules on Alki’s appeal later this summer — but that is only speculation. If the 9th Circuit follows the New York courts’ reasoning, and lifts the injunction, Aereo will have a green light on both coasts; most lawyers, however, say that’s a longshot.

As for Alki, he is busy issuing a strange stream of fulminations about the TV industry’s plot to get him. On May 30, he shared what he says is a “death threat” that warns him to “leave the networks and Aereo alone.”

Consumers, meanwhile, are stuck with expensive cable bundles for the foreseeable future. Aereo has taken the most clever, calculated shot to date at the TV Industrial Complex but, for now, both Aereo and Alki are a ways from forcing the industry to sell rational bundles of channels at a rational price.

]]>The wall that broadcasters and cable companies have built around their services is not long for this world, according to Barry Diller, chairman of IAC. It’s not clear who will tear it down, and it’s not clear when it will actually happen, but the “centricity” of the video world is going to shift from cable and satellite to the internet, he said at D11 Wednesday.

Diller, of course, is doing all he can to help that along by investing in projects like Aereo, which has the established broadcasters running to the courtroom in an effort to get it shut down. Aereo allows people to purchase a digital antenna and receive over-the-air television shows, and as we’ve covered extensively, broadcasters are not happy that Aereo isn’t paying them for that right.

“Cable is a great closed system where the masses, now 100 million subscribers of cable, support ESPN that is only watched by 10 percent. That’s a great little plot so long as you can keep everybody inside the closed circle,” Diller said. “We’re out to get the centricity moved to the internet.”

Several days after Diller’s comments, an ESPN spokeswoman reached out in hopes of contradicting his statement on viewership. “Based on 4th Quarter 2012 data for five measured ESPN networks: 88% of households that can receive ESPN networks tune in to one or more of the networks. In 4th Quarter 2012, ESPN networks reached 89 million households and over 200M persons 2+ in those households – about two-thirds of the U.S. population,” the spokeswoman said in a statement, citing data from Nielsen and including viewership of ESPN, ESPN2, ESPNNEWS, ESPNU, and ESPN Deportes.

CNN’s Jeff Zucker, who was billed as a joint speaker alongside Diller but wound up playing second fiddle to questions for Diller, agreed that a shift will take place but wasn’t totally sure, as might be expected given the company that pays his bills, that it would happen all that quickly. Still, “at the end of the day we don’t care which platform you get your information from,” he said, emphasizing CNN’s digital products.

Younger folks are the ones who are going to make this happen, according to Diller. “I think that young people that don’t now subscribe to cable are maybe going to think of Aereo as an alternative because they don’t want to pay 100 bucks a month for cable,” he said.

Which tech companies will make this happen? Diller listed Apple (“I don’t think it’s some big secret that they’ve been working for years on trying to solve television”), Amazon and Microsoft.

This post was updated June 3rd after an ESPN spokeswoman sought to clarify Diller’s remarks.

]]>According to a report in Variety magazine, as well as a leaked internal memo, media mogul Barry Diller’s IAC is looking to unload its struggling Newsweek title to anyone who is willing to take it on — provided they want to absorb its substantial liabilities, of course. Diller himself acquired the magazine as part of a merger with The Daily Beast in 2010, and has since described this as a “fool’s errand.” Not exactly a shining recommendation to a would-be buyer, and there are many who believe that Newsweek‘s brand is irreparably damaged. But is it? Or could it be reinvented for a real-time web era?

Admittedly, this would be a king-size task, and may even be impossible. Newsweek was already a fairly weak player in the news-magazine game even before it was sold by its previous owner, the Washington Post, to Sidney Harman for the princely sum of $1. There were plenty of sceptics when it came to Diller’s plan to merge the title with Tina Brown’s online-only Daily Beast (which isn’t part of the current sale), and those sceptics have been proven right.

Newsweek tried to stem the bleeding by shutting down its print operations, and then embarked on a fairly predictable revenue grab by announcing a paywall, but it is still struggling. According to Variety, the magazine’s traffic has declined sharply and Diller’s media unit reported a loss in the latest quarter of $8.8 million.

What purpose does a newsmagazine serve?

One of the biggest questions for Newsweek — and even for its more successful counterparts such as Time magazine, which is also reported to be on the block and searching in vain for potential buyers — boils down to this: What does the term “newsmagazine” even mean any more? When news moved at a slower pace and the number of mainstream outlets could be counted on the fingers of one hand, the idea of a weekly magazine that collected and interpreted the major news stories actually made some sense. But not now — not when even a daily newspaper like the Washington Post seems antiquated.

So what any new owner of Newsweek would have to do — whether it’s Reuters, as some have suggested, or someone else such as Yahoo, whose CEO has been on an acquisition spree of late — is reinvent what it means to be a newsmagazine in the age of Twitter and blogs and aggregators like BuzzFeed and the Huffington Post. Is that even possible? I don’t really know. But what follows are a few things any new owner might want to try if they really intend to keep the brand alive and try to make it relevant again.

Forget about the paywall for now: Newsweek doesn’t even seem to have enough content that people are willing to read for nothing, let alone pay for. Until it changes that perception, a paywall is totally the wrong strategy. By building up a reputation for smart content of all kinds — whether it’s short news items or longform analytical pieces — Newsweek could create enough demand that it might then be able to launch some kind of “Pro” content offering (as the Atlantichas hinted it may), but that takes time.

Out-aggregate the aggregators: One of the things any modern news entity has to compete with is the sheer quantity of aggregated or “curated” news, whether it’s briefs that appear on The Huffington Post or BuzzFeed, or posts that appear on Facebook and Twitter and Google News, which may give readers as much as they want to know about a topic. That’s what the front part of a magazine like Newsweek used to do as well, and it served a purpose. There’s no reason why it couldn’t do that again for the web.

Go deep on a few topics: In the same way that mass-market, general-interest newspapers serve less of a purpose than they used to before the web came along, so do broad, mass-market newsmagazines who try to cover everything. Newsweek should choose one or two topics to double-down on — such as politics, or business, or social issues — and devote all its energies to those. It could even set up separate portals for each, as The Atlantic has done with Atlantic Cities or Quartz.

Develop some strong voices: One of the reasons why the departure of writers like Andrew Sullivan (who quit The Daily Beast to launch Daily Dish) is such a big deal is that their passion and personal take on topics is what draws a lot of readers. In an age where all media is becoming social (whether it wants to or not), a personal voice is worth more than dozens of unsigned pieces of reportage. Newsweek needs to either develop or buy some strong personalities.

Go big on mobile: Having an iPad app isn’t enough any more, not if you want to stand out and grab new mobile users. Newsweek could make a bold move and dump its apps altogether and go native HTML instead, the way the Financial Times has, and use a smart “responsive” design like Atlantic Media’s Quartz. Or it could offer a news aggregation service designed specifically for mobile, the way Trinity Mirror is trying to do with its new Us vs. Th3m offering. At this point, anything would be an improvement.

It’s entirely possible that even if a new owner tried all of these suggestions, Newsweek might still fail. At this point, the name and brand of the magazine could be totally beyond saving. But if someone other than Barry Diller has the resources to try and revitalize it, it would be one of the biggest success stories since David Bradley took over The Atlantic and made it a poster child for how to turn around a century-old title.